NAJAF, Iraq (CNN) --Iraqi police have arrested two men believed to be Pakistanis -- with possible connections to al Qaeda -- who they suspect are tied to Friday's deadly car bombing at one of the Shiite Muslims' most revered mosques, the governor of Najaf said Saturday.

Police launched a wide-ranging investigation in the hours after the explosion in Najaf killed 126 people, including a leading cleric. At least 12 people have been detained, Iraqi police said. It was not known if any of those detained had been charged in the bombing.

Throngs of Shiites crowded the square outside the Imam Ali Mosque to mourn the death one of their top clerics, Ayatollah Mohammad Baqir al-Hakim, who was among those killed in the attack.

At least 2,000 people crowded the streets of Baghdad Saturday, shouting anti-American slogans and denouncing the Baath party of former leader Saddam Hussein.

Iraqi experts say they are concerned chaos and civil war could break out between the two different sects in Iraq. (Full story)

Funerals for many of the victims took place Saturday, and a three-day mourning period -- announced by the U.S.-appointed Iraq Governing Council -- also began Saturday.

Meanwhile, Mohammed Baher al-Alum, a leading Shiite politician, announced Saturday that he was suspending his membership in the U.S.-appointed Iraq Governing Council in protest of the mosque attack.

Friday's explosion went off just outside the mosque's entrance about 2 p.m. (6 a.m. ET). Buildings 100 yards in front of the mosque had extensive damage, and video of the mosque showed part of the wall surrounding the front of the building had collapsed. However, the large mosque was largely intact.

An elaborate funeral procession is planned for al-Hakim, the spiritual leader of the Supreme Council for Islamic Revolution in Iraq (SCIRI), once his body is found. Truckloads of Shiites from Baghdad, Basra, and other areas arrived in Najaf overnight to participate in the mourning.

The procession is scheduled to begin Sunday in a Shiite neighborhood in the Iraqi capital, before it goes to Karbala the next day and then to Najaf on Tuesday.

Early Saturday, people were still digging through the wreckage in front of the mosque looking for bodies.

Hospitals were overwhelmed with the dead and wounded, with doctors operating on patients in the hallways and blood covering the floors.

Safa al Hamidi, director of the Najaf Teaching Hospital, said many of the dead were burned beyond recognition. The hospital was treating at least 142 wounded people, he said Friday.

Najaf, about 100 miles south of Baghdad, is Shia Islam's holiest city and the Imam Ali Mosque is one of the Shiites' most holy sites. The deadly explosion there was likely to send shock waves throughout the Shiite world.

In the United States, President George W. Bush strongly condemned the bombing, calling it a "vicious act of terrorism" aimed at the ayatollah "and at the hopes of the people of Iraq for freedom, peace, and reconciliation."

Witnesses in Baghdad said about 300 members of the Badr Corps -- the armed wing of the SCIRI -- left Baghdad wearing military-style uniforms and armed with guns and rocket-propelled grenades, saying they were going to Najaf.

Mohammad Baqir al-Hakim returned to Najaf in May to the cheers of thousands of Shiites. Speaking to the gathered Muslims, he called for a democratic Iraq, but rejected a secular government, saying it would not respect Islam.

"As a supreme council we call for an Islamic state because we are Islamic," he said in May, but "not at the exclusion of others."

The ayatollah, who did not support the war that ousted Saddam, was also a vocal critic of the U.S. presence in Iraq after the war, saying in May it was in the "best interests of everyone for the Americans to leave as quickly as possible."

But the ayatollah -- who was marked for death by Saddam in the late 1990s -- had been somewhat cooperative with the coalition. His cousin, Abdel Aziz al-Hakim, represents the SCIRI on the Iraq Governing Council.

In April, another exiled Shiite leader was killed at the mosque. Sayed Abdul Majid al-Khoei returned from exile in London and was shot inside the mosque while attending a meeting attempting to reconcile rival Shiite factions. He was then dragged outside and stabbed to death.

A bomb last week at the home of al-Hakim's uncle killed three people and wounded 10, about a half mile from the mosque. The ayatollah's uncle suffered minor injuries.

In another development, the United Nations humanitarian official said Saturday that U.N. "remains engaged" in Iraq, even though it will reduce its international staff as a security precaution after last week's truck bombing at the Baghdad U.N. office, which killed 23 people.

"The United Nations remains engaged in Iraq, remains in full solidarity with the Iraqi people in this moment of need, remains available to find ways that you, the Iraqis, recover your full independence, your full sovereignty and the pride that makes you so unique," said Ramiro Lopez da Silva, the U.N.'s humanitarian coordinator for Iraq.

He spoke at the site of the blast, where the final ceremony to remember victims of last week's attack took place Saturday.

Currently there are about 400 international U.N. staffers in Iraq -- about 110 of them in Baghdad. A U.N. spokesman in New York announced Friday that after the cuts, only about 40-50 essential staff members will remain in Baghdad.